Daimler’s Mercedes-Benz unit is returning to its role as the company’s cash cow

Article by Christian Andrei, on August 26, 2010

This year, Daimler AG's Mercedes-Benz Cars unit has retaken its old role as the ever dependable unit to bring in the cash, since at the rate that it's going, it will earn twice as much what was forecasted. The unit's premium car lineup has received much demand, boosting its confidence in the recovering market.

The carmaker said that earnings before interest and tax from ongoing business in the Mercedes division will reach 2.5 billion euros ($3.5 billion) to 3 billion euros in 2010.

Previously, Daimler had forecast an EBIT of over 1.5 billion euros for this year for the division -- the company's largest when it comes to sales.

The company also revealed that the EBIT in the first quarter was backed up by "very solid results at Mercedes-Benz Cars" due to the strong sales, model mix and pricing and a favorable overall cost position during the first quarter.

These results were actually not expected before April 27. In the past, Mercedes had lost out to BMW AG with its more fuel-efficient cars, and to premium carmaker Audi, which has gotten high profits due in part to its deal to share costs with parent Volkswagen AG.

But in the first quarter of 2010, sales of Mercedes cars have improved, increasing more than 10% each month compared with the previous year. [via autonews - sub. required]

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